Chase v. Andeavor Logistics

686 F.Supp.3d 854

JoAnn CHASE, Estate of Nelson Fredericks, Inez Burr, Sandra Gillette,Marion Rasmuson, Joan Matthews, Amanda Bird Bear, Roger Bird Bear,Thomas Bird Bear, Jamie Lawrence, Rae Ann Williams, Evelyn Lone Bear,Doreen Charging, Mavis Huber, Betty Young Bird, Noreen Young Bird,Joan Young Bird, Murphy Young Bird,Donovan Fast Dog, Joyce Eakin, Josephine Parenteau, George Fast Dog,Denise Cavanaugh, Karen Koite, Arnold Young Bird, Darryl Turner,Heather Demaray, Darlene Edley, Eunice White Owl, Linda Kroupa,Waylon Young Bird, Deborah Staples, Anthony White Owl,Eugene White Owl, Kathleen White Owl, Margo Bean, Albert Whitman,Herbert Pleets, Monique Pleets, Sharon Aubol, Janet Benton, Gloria Fast Dog,Valeri Hosie, Betty Matthews, Kenneth Matthews Sr., Sheridan Matthews,Wilson White Owl, and Tiffany Williams, Plaintiffs, v. ANDEAVOR LOGISTICS, L.P, Andeavor, f/k/a Tesoro Corporation, Tesoro Logistics, GP, LLC,Tesoro Companies, Inc.,and Tesoro High Plains Pipeline Company, LLC, Defendants.

Case No. 1:19-cv-00143

United States District Court, D. North Dakota

Signed August 8, 2023

Dustin T. Greene, Kilpatrick Townsend & Stockton LLP, Winston-Salem, NC, Jason P. Steed, University of Kentucky, Lexington, KY, Keith Michael Harper, Krystalyn Kinsel, Pro Hac Vice, Jenner & Block, LLP, Stephen Matthew Anstey, Kilpatrick Townsend & Stockton LLP, Washington, DC, for Plaintiffs.

Jeffrey A. Webb, Norton Rose Fulbright US LLP, San Antonio, TX, Robert D. Comer, Pro Hac Vice, Norton Rose Fulbright US LLP, Denver, CO, Mark Emery, Norton Rose Fulbright US LLP, Washington, DC, Matthew A. Dekovich, Norton Rose Fulbright US LLP, Houston, TX, for Defendants.

ORDER GRANTING, IN PART, DEFENDANTS' AMENDED MOTION TO DISMISS

Daniel M. Traynor, United States District Judge

[¶1] THIS MATTER comes before the Court on reconsideration of the Amended Motion to Dismiss filed by Andeavor Logistics, L.P., and its co-defendants (collectively, "Andeavor") on August 7, 2019, after the Court of the Appeals for the Eighth Circuit reversed and remanded this Court's prior order. Doc. No. 73. See also Chase v. Andeavor Logistics, L.P., 12 F.4th 864 (8th Cir. 2021). JoAnn Chase and the other putative class action plaintiffs (collectively, the "Allottees"), filed their original opposition to the Motion on September 5, 2019 (Doc. No. 85), and a renewed opposition on June 20, 2023 (Doc. No. 134). Andeavor originally filed its reply on October 2, 2019 (Doc. No. 86), and submitted a supplemental reply on June 30, 2023 (Doc. No. 138). For the reasons set forth below, the Court GRANTS, in part, Andeavor's Motion.

BACKGROUND

[¶2] This case has proceeded through a long and tumultuous history spanning three different courts and approximately five years. The Court must now answer whether individual Indians who are equitable owners of allotted lands held in trust by the United States may assert a federal common law cause of action for trespass. In short, they may not.

[¶3] The alleged facts and history of this case have often been repeated. See Doc. No. 100; see also Chase, 12 F.4th at 866-68. Accordingly, the Court will only recount those alleged facts and details relevant to the instant Motion.

[¶4] Dating back to 1953, Andeavor's predecessor-in-interest operated an oil pipeline that crossed portions of Fort Berthold Indian Reservation in North Dakota. That predecessor-in-interest was granted a twenty-year right-of-way ("ROW") for the pipeline from the Department of the Interior, as is contemplated in 25 U.S.C. §§ 323, 324. Although the ROW was renewed for additional twenty-year terms in 1973 and again in 1995 (retroactively so in 1995, making its effective renewal in 1993), it expired in 2013. Despite this expiration, Andeavor continued to operate its 500-mile High Plains Pipeline System across both tribal lands and allotted lands held by individual Native Americans after 2013.¹

[¶5] In 2017, the Mandan, Hidatsa, and Arikara Nation, known as the Three Affiliated Tribes, agreed to renew Andeavor's ROW—but only for the ROW through tribal trust land. Andeavor's negotiations with individuals who owned allotted lands held in trust by the United States proved to be largely unfruitful, resulting in Andeavor not possessing a renewed ROW over significant portions of allotted lands. See 25 U.S.C. § 324 (allowing ROWs "over and across lands of individual Indians [to] be granted without the consent of the individual Indian owners" only when, for instance, "the owners or owner of a majority of the interests therein consent to the grant").

[¶6] Certain individual landowners of such allotments (i.e., the Allottees) rejected Andeavor's offers and proceeded to file the instant action in the Western District of Texas on October 5, 2018. See Doc. No. 1. Their original Complaint alleged claims for: (1) continuing trespass; and (2) constructive trust. Id. In response, Andeavor moved to dismiss the Allottees' Complaint on various grounds and also to transfer the case from the Western District of Texas to the District of North Dakota. See Doc. Nos. 17, 22. With the motions still outstanding, the Allottees filed their First Amended Complaint on January 25, 2019, adding new counts and theories. See Doc. No. 28. In the First Amended Complaint, the Allottees asserted claims of: (1) continuing trespass under federal common law; (2) breach of easement agreement; (3) unjust enrichment—imposition of constructive trust; and (4) punitive damages. Id.

[¶7] On July 9, 2019, the District Court for the Western District of Texas granted Andeavor's Motion to Transfer the case to the District of North Dakota and either denied or denied as moot the Parties' remaining motions. Doc. No. 67.

[¶8] Soon thereafter, Andeavor filed the instant Amended Motion to Dismiss, arguing there were four "separate, alternative, and independent grounds for dismissal" of the entire action. Doc. No. 73, p. 1 n.1. Specifically, Andeavor contended: (1) the Court lacked subject matter jurisdiction because the case did not invoke federal question jurisdiction; (2) the Allottees failed to state a claim upon which relief could be granted because they could not assert a federal common law claim for trespass; (3) the Allottees failed to join a necessary party under Federal Rule of Civil Procedure 19(a); and (4) the Allottees failed to exhaust their administrative remedies and there was a lack of primary jurisdiction. Id. at pp. 3-10.

[¶9] The Parties fully briefed the issues (see Doc. Nos. 85, 86, 87, 90, 91), and then the case was reassigned to the undersigned (Doc. No. 92). The Allottees proceeded to file their Renewed Motion for Class Certification on March 25, 2020. Doc. No. 93.

[¶10] On April 6, 2020, this Court granted, in part, Andeavor's Amended Motion to Dismiss. Doc. No. 100. The Court dismissed the First Amended Complaint on the ground that the Allottees failed to exhaust their administrative remedies and denied as moot Andeavor's remaining grounds for dismissal. Id. The Allottees appealed the Order to the United States Court of Appeals for the Eighth Circuit on April 7, 2020. Doc. No. 102.

[¶11] While awaiting the Eighth Circuit's decision, the Bureau of Indian Affairs ("BIA") took action about the instant matter, resulting in a back-and-forth drama:

On July 2, 2020, after the Allottees submitted their initial Brief on appeal [with the Eighth Circuit], the Regional Director of the BIA's Great Plains Regional Office (which covers North Dakota) sent a formal Notification of Trespass Determination to Andeavor (the "Notice"). The Notice stated that the pipeline had been trespassing on fifty acres of individually-owned trust lands for seven years, reflecting Andeavor's lack of good faith negotiations, and therefore the pipeline was no longer in the landowners' best interest. The BIA ordered Andeavor to immediately cease pipeline use and pay treble damages totaling $187.2 million within thirty days, a decision Andover could appeal to the Interior Board of Indian Appeals (IBIA). Andeavor appealed, arguing the Notice ignored that it was in holdover status while negotiating with landowners, ignored its substantial work to obtain fair-market value appraisals, disregarded its record-setting offer of $66,000 per acre to the landowners, and calculated damages based on inapplicable grazing regulations.

Before the IBIA could rule, the Assistant Secretary for Indian Affairs assumed jurisdiction over the appeal (as regulations allow), vacated the Notice, and remanded to the Regional Director to issue a new decision based on specified criteria. The Assistant Secretary's order asserted that federal common law applied to Andeavor's trespass. In later supplemental guidance, the Regional Director was advised to rely only on 25 C.F.R. § 169.410 and common law remedies to address the trespass. The guidance stated that federal common law authorizes the BIA to seek judicial remedies, including compensatory damages, on behalf of Indian landowners for trespass claims against right-of-way holdovers. It cited 28 U.S.C. § 2415(b), a statute of limitations that requires actions by the United States or its agencies on behalf of "a recognized tribe, band, or group of American Indians" to be brought "within six years and ninety days after the right of action accrues." On remand, the Regional Director issued a Second Notice reducing the damages award to just under $4 million, ordering Andeavor to immediately cease operating the pipeline, and informing Andeavor the BIA might petition the Department of Justice to seek common law damages including an accounting of all rents and profits tied to its trespass. Both Andeavor and the Allottees appealed the Second Notice to the IBIA. On January 14, 2021, the Assistant Secretary again assumed jurisdiction over the appeal, affirmed the Second Notice in its entirety, and declared it judicially reviewable as a final agency action. The IBIA dismissed the parties' appeals.

On March 12, 2021, after the change in

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